Term Loan Scheme

A Term Loan Scheme scheme is a credit facility where a specific capital amount is provided for a fixed duration, repayable in scheduled installments. In India, the government facilitates several such schemes through state agencies to empower marginalised groups.

The Term Loan Scheme by National Minorities Development & Finance Corporation (NMDFC) is  a primary national initiative targeting notified Minorities (Muslims, Christians, Sikhs, Buddhists, Parsis, and Jains) to promote self-employment through concessional credit. 

A key pillar of this mission in Maharashtra is the NSFDC Team Loan, an initiative of the Department of Social Justice and Special Assistance. It is funded by the National Scheduled Castes Finance and Development Corporation (NSFDC). Specifically designed for the Charmakar community (Dhor, Chambhar, Holar, and Mochi), the NSFDC Term Loan Scheme helps beneficiaries move away from traditional labor toward stable business activities, such as leather goods production, by providing the financial support necessary for long-term economic and social growth.

While both schemes aim for socio-economic upliftment, they offer specific financial structures tailored to the needs of the beneficiary:

• Substantial Capital Access: The NSFDC term loan in Maharashtra focuses on projects between ₹1 Lakh to ₹2.5 Lakh. On the other hand, NMDFC offers a wider range, providing up to ₹20 Lakh under Credit Line-1 and up to ₹30 Lakh under Credit Line-2.
• Comfortable Repayment Window: Both schemes offer a repayment period of up to 60 months (5 years), allowing the business enough time to become profitable.

• Direct Subsidy: The NSFDC Term Loan scheme in Maharashtra includes a direct subsidy of ₹10,000  whereas NMDFC offers a 2% interest rebate specifically for female beneficiaries under Credit Line-2.
• Low Beneficiary Contribution: Entrepreneurs only need to contribute 5% of total project cost from their own funds, with the government the remaining 95%.
• Concessional Interest Rates: Interest is kept minimal to encourage growth. NSFDC rates typically start at 7% p.a., while NMDFC Line-1 starts as low as 6% p.a.

Similarly, the Pradhan Mantri Mudra Yojana (PMMY) complements these efforts by providing ‘Mudra Loans’ up to ₹20 Lakh to non-corporate, non-farm small and micro enterprises in India, bridging the gap for those who may require collateral-free institutional credit.

To qualify for the above mentioned term loan schemes, applicants must meet the following conditions:

For the NSFDC Term Loan scheme:

• The applicant must belong to the Charmakar community (Dhor, Chambhar, Holar, Mochi, etc.)

• The applicant must be a permanent resident of Maharashtra

• The applicant's age should be between 18 and 50 years

• The applicant should have the necessary knowledge or experience in the specific business or trade for which the loan is requested

• For those seeking the 50% Subsidy Scheme or Margin Money, the applicant's annual income must fall below the poverty line

• The applicant must be able to provide a valid Income and Caste Certificate issued by the government

• To access the NSFDC Scheme, the annual family income must not exceed:

  • ₹98,000 for applicants in rural areas

  • ₹1.2 Lakh for applicants in urban areas

For the NMDFC Term Loan scheme:

• The applicant must be an Indian citizen from a notified minority community (Muslim, Christian, Sikh, Buddhist, Parsi, or Jain).

• Annual family income should be within ₹3 lakh (Credit Line–1) or ₹8 lakh (Credit Line–2).

• The applicant must be 18+ and eligible for self-employment.

• No pending or defaulted loans under any Central/State Government scheme.

• The proposed project must be financially viable and technically sound.

• Valid Aadhaar-linked bank account, residence proof, income certificate, and minority certificate are required.

• Preference is given to women, youth, and minority occupational groups.

• Borrower and asset insurance is compulsory as per NMDFC norms.

It is important to note that the application process for the Term Loan Scheme in Maharashtra is currently conducted strictly through offline mode. Applicants must physically visit the designated offices to initiate their request. Follow these steps to complete your application:

​​Step 1: Obtain the Official Form

Visit the District Office of the Sant Rohidas Leather Industries & Charmakar Development Corporation (LIDCOM) during standard business hours. Request the "Prescribed Application Form" for the Term Loan Scheme from the authorized desk.

Step 2: Complete Documentation

• Fill with Precision: Complete all mandatory fields in the form to avoid rejection.

• Photo Requirement: Affix a recent passport-sized photograph. If requested, ensure you sign across the photo (half on the photo, half on the form).

• Self-Attestation: Attach clear, self-attested photocopies of all required supporting documents (Aadhar, Caste Certificate, Income Proof, etc.).

Step 3: Formal Submission

Submit your completed application packet to the concerned officer at the LIDCOM District Office. Ensure your submission is made within the official window or deadline prescribed for the current financial year.

Step 4: Secure Your Acknowledgement

Do not leave the office without a formal receipt or acknowledgement. This document must include:

• The official date and time of submission.

• The receiver’s signature/stamp.

• A Unique Application ID for tracking your loan status in the future.

Furthermore, as far as NMDFC Term Loan is concerned,  its offline application process is through programs through nominated State Channelising Agencies (SCAs) and Banking Partners like Canara Bank and Punjab Grameen Bank. Whereas, you can also apply digitally through the UMANG app for a streamlined process.

The NSFDC Term Loan Scheme in Maharashtra and the NMDFC initiative are transformative tools for social equity. By lowering interest barriers and providing high project coverage, these schemes allow the Charmakar and Minority communities to build a legacy of self-employment and long-term income growth. For those looking to explore additional funding options, Bajaj Markets offers an easy way to compare and access business loans from diverse lenders, helping you find a suitable choice to match your unique capital needs and business goals.